A new study has calculated that Alistair Darling’s £30,000 flat rate charge for non-domiciled residents will cost the Government £2bn, more than twice the amount it was designed to raise.
Darling’s new tax plans, announced in his pre-budget report in October, were expected to raise an additional £800m annually.
But a study conducted by the Society of Trust and Estate Practitioners has found the proposals will be counter-productive as tax revenues will fall and UK investments will be sold.
It found over half of the UK’s super wealthy are already leaving, making contingency plans to leave or sell their UK investments.
Step director of policy Keith Johnston says: “For the first time we can confirm that wealth generators are preparing to leave the UK in significant numbers. We now know wealthy foreigners invest between £75 and £125bn in the UK and pay £7.16bn in tax. Instead of generating more revenue the Government’s proposals will mean jobs, investments and tax revenue going abroad.”